HALLS CREEK MINE
JOHANNESBURG (miningweekly.com) – The construction of ASX-listed Pacific Niugini’s Nicolsons gold mine near Halls Creek, in Western Australia, was progressing well, with the majority of the required infrastructure completed, the junior gold developer reported on Monday.
Pacific Niugini is developing the project through its wholly owned subsidiary, Halls Creek Mining, and is the 80% equitable owner of the project. Junior gold company Bulletin Resources, which owns 20% of the project, is contributing to project costs in accordance with its equitable interest.
The project provides an immediate four-year production plan with high grades and planned yearly production of 25 000 oz to 30 000 oz.
Operations at the Nicolsons mine started in April this year, and to date about 250 m of decline development had been completed.
Pacific Niugini reported that overall site development had progressed in parallel with the mine development, and the processing plant refurbishment work was nearing completion.
“The finalisation of the site power station was disrupted by the contracted power provider falling into administration after delivering generators to site, but prior to connected and operation,” the company pointed out.
However, Pacific Niugini stressed that project management personnel worked quickly to identify and engage an alternative provider, and expected to have full power connected by mid-July.
The company added that all other surface infrastructure was in place including office and ablution facilities.
A new tails dam, which provided the mine with an initial two years of capacity, had also been completed.
The decline development had traversed “random and unanticipated” zones of poor quality, partially oxidised ground which had resulted in slow progress and additional cost to support, said Pacific Niugini.
It also noted that drilling about 40 m north of the current decline position indicated substantially better ground conditions above the current level of the decline, and the decline was currently advancing towards that area.
Based on current planning, and assuming that the anticipated ground conditions were encountered, the company expected to intersect first ore in the next two weeks.
Pacific Niugini said it intended to start processing ore on a campaign basis during August, with full production to be achieved around October and November this year.
The company further stated that while the overall mine plan and “big picture” remained intact, the delay in timing to access the first ore levels was likely to impact on mine revenue during the early months of operation.
Further, Pacific Niugini said the finance package (gold prepay) in place with the Commonwealth Bank of Australia had minimum cash levels to be held in loan and proceeds accounts, which might be breached if ground conditions continued to impact progress in the absence of further funding.
“We are also keen to progress evaluation and extension of the current resources base and the other nearby advanced targets to expand our operational output,” Pacific Niugini concluded.